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I am not very bullish about the future of ads but I don't see Google being limited to ads. Search is not valuable enough for users at the moment to pay for it.

I am not very bullish about the future of ads but I don't see Google being limited to ads. Search is not valuable enough for users at the moment to pay for it. But with the advent of AI, your "AI companion" will become so valuable that users will probably pay hundreds of dollars per month for it. Apart from that, they build phones, run datacenters, develop self driving cars, business software ... As for Azure, I think Googles cloud business is in the same order of magnitude. I don't see one of them having a long term competitive advantage here. As for Apple, I think consumer demand in tech will grow just like business demand in tech will grow. And I don't see anyone disrupting Apple either. They will just continue to iterate and grow. IF some new development appears on the horizon, then it will be interesting how the 3 CEOs will position themselfes. But at the moment, I don't see anything that will disrupt any of these companies.

ashwoods 5y ago
The parent mentioned not what alphabet does, but where it gets (most) of its revenue from. Google is making phones, but not really making a lot of money from them. So the question is, what is the future of alphabet?
sailingparrot 5y ago
> Apart from that, they build phones, run datacenters, develop self driving cars, business software ... But none of those have significant impact on their revenues. If ads business tanks for a reason or another (new legislation around privacy, or remake of 2020 Covid-related ad bust), then they tank as well. Cloud revenue is probably one of their biggest non-ad revenue stream, but it's less than ~5% of total revenue. And Waymo, DeepMind etc, are all moonshots, they currently make 0$, but that's also where the disruption potential could come from. So if you believe in them, that could be a good reason to invest. > As for Azure, I think Googles cloud business is in the same order of magnitude. Azure is ~4x bigger than GCP.
- ArtTimeInvestor 5y ago
  > If ads business tanks Sure. If disruption appears on the horizon in one of the sectors these tech companies are in, then it will get interesting how the CEOs position themselves. But at the moment I don't see that in any of the sectors. So I don't have an hypothesis to rank Goole/Apple/Microsoft. All three hum away in a similar fashion at the moment.
  - sailingparrot 5y ago
    I'm not sure what you are getting at. My point is that they are very different companies, with different ways of making money and different risk profiles. But all with massive growth currently. So to your question about which one to invest into, then you would make that decision based on which vertical you prefer (ads? service? consumer hardware?) or which one is more risk tolerant. Or since they don't overlap that much (when just looking at tech), you could invest in all threes. Unlike say, FB and GOOG, which are both suffering from the same risks (but are making different bets for the long term).
    - ArtTimeInvestor 5y ago
      I did not ask "which one to invest into" as in getting a suggestion. I asked about which one you would invest into and your reasoning behind it.
danaris 5y ago
> But with the advent of AI, your "AI companion" will become so valuable that users will probably pay hundreds of dollars per month for it. If that's true—of which, respectfully, I am highly skeptical—that doesn't mean they'll be making vast amounts of money. Most people—like, at least 70% of Americans—can in no way, shape, or form afford hundreds of dollars per month on something like that.
- ArtTimeInvestor 5y ago
  Maybe they can. Most americans go to school, right? What if an AI companion makes that obsolete? University too. Those are very expensive years that can be saved. Maybe you cannot get a high paying job anymore without a $500/month AI companion because without it you are considered stupid. How about doctors? How much visits to a doctor can be made obsolete with an AI companion? How about entertainment. Americans spend something like $200 per month on entertainment. Maybe your AI companion can entertain you better.
  - danaris 5y ago
    > Maybe you cannot get a high paying job anymore without a $500/month AI companion because without it you are considered stupid. This is very much saying "maybe if you're not already rich, you shouldn't be allowed to get a good job."
    - ArtTimeInvestor 5y ago
      Is it currently different? A college degree in the US costs tens of thousands of dollars. And years of your time. With an AI companion, you might have to pay $500/month but maybe you can start working right away. Skipping all those "learning" years.
      - mcphage 5y ago
        A college degree also signals something: that you stuck with something for years, and finished it, and that your college believes you learned something along the way. With an AI companion, all you signal is that you have several hundred a month to spend on an AI companion.

ashwoods 5y ago

The parent mentioned not what alphabet does, but where it gets (most) of its revenue from. Google is making phones, but not really making a lot of money from them. So the question is, what is the future of alphabet?

sailingparrot 5y ago

> Apart from that, they build phones, run datacenters, develop self driving cars, business software ... But none of those have significant impact on their revenues. If ads business tanks for a reason or another (new legislation around privacy, or remake of 2020 Covid-related ad bust), then they tank as well. Cloud revenue is probably one of their biggest non-ad revenue stream, but it's less than ~5% of total revenue. And Waymo, DeepMind etc, are all moonshots, they currently make 0$, but that's also where the disruption potential could come from. So if you believe in them, that could be a good reason to invest. > As for Azure, I think Googles cloud business is in the same order of magnitude. Azure is ~4x bigger than GCP.

ArtTimeInvestor 5y ago
> If ads business tanks Sure. If disruption appears on the horizon in one of the sectors these tech companies are in, then it will get interesting how the CEOs position themselves. But at the moment I don't see that in any of the sectors. So I don't have an hypothesis to rank Goole/Apple/Microsoft. All three hum away in a similar fashion at the moment.
- sailingparrot 5y ago
  I'm not sure what you are getting at. My point is that they are very different companies, with different ways of making money and different risk profiles. But all with massive growth currently. So to your question about which one to invest into, then you would make that decision based on which vertical you prefer (ads? service? consumer hardware?) or which one is more risk tolerant. Or since they don't overlap that much (when just looking at tech), you could invest in all threes. Unlike say, FB and GOOG, which are both suffering from the same risks (but are making different bets for the long term).
  - ArtTimeInvestor 5y ago
    I did not ask "which one to invest into" as in getting a suggestion. I asked about which one you would invest into and your reasoning behind it.

danaris 5y ago

> But with the advent of AI, your "AI companion" will become so valuable that users will probably pay hundreds of dollars per month for it. If that's true—of which, respectfully, I am highly skeptical—that doesn't mean they'll be making vast amounts of money. Most people—like, at least 70% of Americans—can in no way, shape, or form afford hundreds of dollars per month on something like that.

ArtTimeInvestor 5y ago
Maybe they can. Most americans go to school, right? What if an AI companion makes that obsolete? University too. Those are very expensive years that can be saved. Maybe you cannot get a high paying job anymore without a $500/month AI companion because without it you are considered stupid. How about doctors? How much visits to a doctor can be made obsolete with an AI companion? How about entertainment. Americans spend something like $200 per month on entertainment. Maybe your AI companion can entertain you better.
- danaris 5y ago
  > Maybe you cannot get a high paying job anymore without a $500/month AI companion because without it you are considered stupid. This is very much saying "maybe if you're not already rich, you shouldn't be allowed to get a good job."
  - ArtTimeInvestor 5y ago
    Is it currently different? A college degree in the US costs tens of thousands of dollars. And years of your time. With an AI companion, you might have to pay $500/month but maybe you can start working right away. Skipping all those "learning" years.
    - mcphage 5y ago
      A college degree also signals something: that you stuck with something for years, and finished it, and that your college believes you learned something along the way. With an AI companion, all you signal is that you have several hundred a month to spend on an AI companion.